Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.

The Class III market hit a headwind Thursday morning and settled into choppy, two-sided trade amid a quiet spot session and softening dry whey futures market.

1,268 contracts traded while Open Interest increased by a mere 32 contracts. It was a day marked by consolidation of recent gains. And though the market fundamentals that caused this week’s rally are still in play, the futures action yesterday leads us to expect more of downward correction going into the weekend.

For the week ending April 6, dairy cow slaughter under federal inspection was down 1.1 percent, at 62,400 head, compared with the same period the previous year. Year-to-date slaughter levels are 4.1 percent higher than 2012 levels, with 901,900 head slaughtered.

Spot session results:

Block cheese: $1.885 (unchanged)

Barrel cheese $1.76 (unchanged)

Grade A NFDM: $1.785 (unchanged)

Butter: $1.7875 (up 0.75 cent)

In the grain complex, beans managed a slightly higher close for a 2nd day, while corn was wacked hard despite some short-term bullish weather report alongside a wheat market that was mixed.  Export sales explain some of it; fund activity explains much the rest of it. If the weather doesn’t clear up immediately, look for corn to bounce. But if planting gets a big push next week, then watch out for a swift move down.

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